Council continues tax rate discussions


Correction: the original story incorrectly attributed Councilman Kevin Rider’s quotes to Councilman Adam Haynes.

As the Aug. 7 deadline for ballot language to be submitted to the Delaware County Board of Elections draws nearer, Delaware City Council continued its discussion on how the city plans to approach the next ballot measure regarding the income tax increase for the November election.

Ahead of the meeting, the city’s Finance Committee met on May 2 to make its recommendation to the council. That recommendation, which passed by a vote of 2-1, was to resubmit the same proposal that failed in March and add the caveat that should the levy fail again, the council must consider legislation that reduces or eliminates the tax credit for those working outside of Delaware.

The March proposal included a five-year temporary levy that would have raised the income tax rate from 1.85% to 2.2% while keeping the credit at 50%. An estimated $7.7 million would have been raised annually under the structure. The levy was soundly defeated at the ballot as 62.6% of voters turned it down.

On Monday, councilmen Cory Hoffman and Kevin Rider both expressed their support of raising the tax increase to 2.5% while adding a 100% tax credit for those working outside of Delaware with the understanding that if the levy still fails, the only alternative will be to eliminate the tax credit entirely.

“If that fails, we have no choice,” Rider said. “We are at the 0% (credit) because we have to get the money. I feel the 2.5% with the 100% credit is the best case scenario for practically everyone, and it would be foolish for residents to not support that given the alternative that will fall on them.”

Hoffman noted he spoke with Powell Vice Mayor Heather Karr regarding Powell’s successful tax increase campaign in 2021. The sentiment he got from Karr was that the critical component of Powell’s proposal was raising the tax credit to 100%. “At the end of the day, I think it has the best chance to win,” Hoffman said.

In response to Hoffman’s suggestion, Vice Mayor Kent Shafer noted that while a raise to 2.25% with a 100% credit would level the rate being paid for everyone, the burden would still fall largely on those who live and work in Delaware.

Councilwoman Linsey Griffith echoed Shafer’s hesitancy to increase the credit to 100% while also expressing optimism that the same levy structure that failed in March could succeed in November given the feedback she received in recent conversations with community members.

“I got a lot of, ‘If we had know what it was actually for, we would have voted for it. But we didn’t understand it.’ So that gives me hope that if we go back to the voters and we do a better job of messaging and making our need clear, that our constituents will support the city,” Griffith said.

Director of Management, Budget, and Procurement Alycia Ballone laid out a third option for consideration in addition to the March proposal and the increase to 2.5% with a 100% credit. The third option would propose an income tax rate increase to 2.4% while increasing the credit to 75% or even a 2.3% rate with a 65% credit, both of which she said would generate similar money to the March proposal.

Ballone noted that any option that includes an increase in the tax credit would need to be changed from a temporary levy to a permanent measure to ensure the city doesn’t find itself in a worse situation if the levy weren’t renewed in five years.

In a memo to the council, City Manager Tom Homan laid out a tentative timeline the city needs to follow in order to get through the necessary ordinance readings and get the ballot language submitted to the board of elections. That timeline includes a first reading of the ordinance during the June 10 council meeting, followed by a second reading and public hearing at the June 24 meeting.

A third and final reading as well as the adoption of the ordinance would need to be held at the July 8 meeting.

“There are a lot of options that we’ve looked at and talked about, but at some point, we have to stop talking about options and come up with what we think is the best thing to do,” Shafer said on Monday. “There is no perfect solution, and none of us have a crystal ball, so we don’t know what the public is going to think when we put it out there. But we do need to come to some kind of conclusion sooner rather than later.”

To conclude the discussion, the council agreed to vote during its next meeting on May 28 on what proposal will be brought before it as an ordinance in June.

Reach Dillon Davis at 740-413-0904. Follow him on X @DillonDavis56.

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